What Is Kickfurther? An Interview with Founder Sean De Clercq

What is Kickfurther?

Kickfurther is a platform for retailers, wholesalers, and manufacturers to fund the purchase or creation of physical inventory.

For example, let’s say you are an online retailer of ski goggles. Your major season is just around the corner and you need to purchase 300 pairs of goggles at a price of $35 a pair for a total of $10,500. Unfortunately, you don’t have the money. Why? Because most banks will not make loans of this size. Your primary options are as follows: paying with a credit card (at interest rates of 15- 20%), getting a working capital loan (at interest rates of around 40%), or financing the purchase with a merchant cash advance (at interest rates around 80%).

Kickfurther aims to provide a more attractive alternative to these options. Conceptually, Kickfurther is a crowdfunding platform for small businesses to finance the purchase of inventory. Technically, the “backers” are buying inventory and creating a consignment relationship with the “brand” (business), where they get back the cost of the inventory plus a certain percentage of profit. The practical implication of it being a consignment relationship is that if a business is not willing or able to pay, the backers could decide to take possession of the inventory.

Recently, I had a chance to speak with the founder of Kickfuther, Sean De Clercq. The following Q & A is reconstructed from my notes and is not a transcript of his exact words. For a complete review of Kickfurther for small business owners, click here.

What problem is Kickfurther trying to solve?

I was a merchandiser that sold to a major catalogue retailer. Of course, we had to pay for the goods from our manufacturers. Typically, manufacturers demand 50% down payment when the order is placed and 50% upon delivery. After the catalogue retailer received the goods, we would have to wait months to get paid. When selling to large retailers, it is fairly common for small business to have to wait 90 days to get paid. In the case of our business, we were often in a position where we had to finance as much as $70,000 for several months.

Traditional financing institutions tend not finance these loans. The newer alternative lenders are sometimes willing to do this financing, but they charge interest rates which can eliminate all the profits from the transaction. The interest rates don’t reflect the fact that there is a physical good that can be sold, supporting the financing. Kickfurther is solving the problem of invoice financing for small businesses by allowing more businesses to get financing at a reasonable cost.

Need some money for your business? Click here to get our FREE Guide:How to Get a Small Business Loan.

Who can qualify for raising money through Kickfuther?

In a short time, we have had over 100 businesses use Kickfurther to finance inventory purchases. The smallest transaction was $900 and the largest $102,000. Unfortunately, a large portion of the applications we receive are for businesses that are not yet operating or are looking for financing not related to inventory.

A business plan is not enough to be listed on the platform. For a manufacturer, we need to see that they have successfully made and sold one product run. For retailers, we are looking for several months of sales history for the type of product that they want to finance. At this point, we don’t look at the credit scores of the business or business owners, but we’re in the process of adding this to our due diligence.

What happens if a business doesn’t pay back their funders on a timely basis?

Depends on what the backers decide to do. The backers own the inventory, so they can choose to give the brand more time to pay them back or have Kickfurther take control of the inventory and try to sell it. There are sometimes very real reasons for delayed payment. For example, there was a strike at the Port of Los Angeles which prevented a huge amount of inventory from coming in from China into the United States. The delivery of inventory was severely delayed for one of the brands that financed through Kickfurther. Their backers decided to give them more time. One of the benefits of financing through Kickfurther is that you are dealing with a community rather than lenders.

Sean De Clercq, CEO of Kickfurther

Before launching Kickfurther, Sean De Clercq was running a merchandising company. Even though sales grew by 50% to $1 million in his second year, he struggled to secure a line of credit to finance his inventory purchase orders. At the same time, Sean recognized he was earning less than 1% in his saving account — and he noticed the explosion of crowdfunding websites. With those two insights, he saw an opportunity to give average income earners access to lucrative capital investment opportunities via crowdfunding inventory. After doing more research and assembling a team, he moved to Boulder for the Boomtown accelerator program. Since then, Sean has focused on rapidly scaling Kickfurther, the future of funding.

Need some money for your business? Click here to get our FREE Guide:How to Get a Small Business Loan.

About the Author

Marc Prosser

Marc Prosser has been involved in many businesses as an executive, advisor, and investor. Prior to starting his own company, Marc Prosser was the first employee and Chief Marketing Officer of FXCM. During his ten years at FXCM, the company grew from a small business to over 700 employees.

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